In a wide-ranging infrastructure development package, the UK government has stated that EDF's proposed EPR project at Hinkley Point C would be eligible for a loan guarantee. In its report, 'Investing in Britain's future' the government also announced plans to increase capital investment in nuclear decommissioning.
Similar attempts have been made in the USA to help push projects forward, in the shape of government loan guarantees for the Vogtle and Summer nuclear new-build projects.
The government also announced plans to extend the guarantee scheme by two years to December 2016.
The announcement is an attempt to firm up government policy on nuclear new build, which it says "has been subject to frequent changes and lacking long-term certainty in the last two decades, with the result that no new nuclear power station has been built in the UK since Sizewell B opened in 1995 and almost all nuclear power stations are due to close in the next decade."
One of the key issues holding up the launch of Hinkley Point C construction is negotiation over the 'strike price', which will apply not only to renewables but also to nuclear sourced power. The government's statement read as follows:
"Investments in low-carbon generation technologies such as renewables, nuclear and carbon capture and storage will in future be underpinned by the new long-term, legally binding Contracts for Difference (CfDs). For the first time these provide generators with protection from fluctuations in the wholesale electricity price, which provides much greater certainty about future revenues. This reduces risk and helps lower the cost of capital. They will also protect consumers from high bills by clawing back money from generators if the market price of electricity rises above the strike price. The arrangements for implementing CfDs are currently in front of Parliament in the Energy Bill."
The government has published draft strike prices for renewables to be finalised in December, but has not published the figure for nuclear. The draft 2014-15 strike price for onshore wind is GBP 100/MWh (in 2012 prices), offshore wind GBP 155, tidal 305, wave 305, biomass conversion 105 and solar large 125. For onshore and offshore wind and solar, the strike prices decline over the five years to 2018-9.
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